The Organization of the Petroleum Exporting Countries (OPEC) concluded its semi-annual meeting Friday in Vienna with a press release congratulating Nigeria’s new minister of state for oil and announcing the election of Qatar’s minister of energy and industry as the group’s leader for the coming year.
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Accordingly, in time with the 50 per cent decline in oil process and lack of balance between supply and demand, some OPEC members like Iran and Venezuela had called for the restoration of quotas system as well as lowering of the production ceiling.
“OPEC will wait until its next meeting in June to confirm its output target”, the group’s Secretary General, Abdalla El-Badri, said at the end of the meeting.
Iran, which plans to increase shipments once worldwide sanctions over its nuclear program are lifted, said it’s only willing to discuss curbs on output after its production reaches 4 million barrels a day, more than 1 million above current levels.
Saudis could propose conditional production cuts The world’s largest oil exporter and OPEC member, Saudi Arabia could propose an eventual cut of a million barrels per day in cartel production, Energy Intelligence reported on Thursday.
OPEC has reportedly agreed to raise its production ceiling to 31.5 bpd.
Saudi Arabia had hinted at cuts in output – but only if OPEC and non-OPEC members followed suit. If prices recover sharply, it could revive some US shale production, displacing OPEC crude.
Even as United Nations climate-conference delegates met near Paris on Friday seeking ways to reduce the globe’s dependence on high-carbon fuels like oil, some of the world’s biggest petroleum producers vowed to keep pumping flat out. The group pumped about 31.4 million in October, according to estimates in its monthly market report.
The cartel’s output makes up around 40 percent of the global crude production.
Oil has slumped since Saudi Arabia led Opec’s decision previous year to maintain production and defend market share against higher-cost rivals. There is global oversupply of 1.5mn to 2mn barrels a day, Iran’s Oil Minister Bijan Namdar Zanganeh said yesterday, before the ministers met.
“We are only 35 percent of the producers and there are still 65… percent producers out there”, said conference president Emmanuel Ibe Kachikwu.
Brent crude oil, one of the world’s key benchmark prices, is down 1.2% at $43.24 a barrel on Friday. But OPEC did not mention a ceiling in its official announcement.
Pressure on the group could build further as Iran comes out from under worldwide sanctions that have suppressed its production, and another six months of low prices eats away at the fiscal position of OPEC members. “Everyone does whatever they want”.
“As companies go through their budgets and review their activity levels I think we can expect to see more activities being reduced and jobs going as a result”, she told ITV News.
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“We are looking for stability in the market”, said Venezuelan minister Eulogio Del Pino.
